India Sets LPG Production Targets for Refiners

The Indian government has, for the first time, established maximum LPG production targets for 21 public and private sector refineries and upstream companies. This strategic move aims to create a robust domestic supply buffer, addressing the country’s vulnerability to imported cooking gas disruptions, particularly highlighted during the recent West Asia conflict.

An order issued by the Petroleum and Natural Gas Ministry on August 13 specifies these maximum LPG production levels. The initiative significantly boosts potential domestic output, reducing reliance on external sources.

Key Production Targets and Reliance

The combined production potential for these entities is set at 63,810 tonnes per day.

This figure more than doubles the domestic LPG output of 35,900 tonnes per day recorded in the fiscal year ending March 31, 2026.

It also accounts for approximately 70% of India’s daily LPG consumption, which stands at 91,000 tonnes.

India’s import dependence, projected to exceed 64% in fiscal year 2025-26, made it highly susceptible to supply chain vulnerabilities, such as those seen when the Strait of Hormuz was impacted by geopolitical events.

Operationalizing the New Mandate

These newly established production limits will be activated specifically during periods of supply constraints to ensure energy security.

The order mandates that refiners and upstream companies maintain adequate infrastructure for LPG storage, evacuation, and transportation.

Furthermore, companies are required to pursue technically and economically feasible upgrades to maximize their LPG output effectively.

The government has reserved the authority to direct these entities to increase LPG production for specified quantities and periods whenever necessary, ensuring domestic availability and fair prices.

The production schedule will undergo a bi-annual review to incorporate new facilities and account for capacity enhancements through technological and infrastructural improvements.

Allocations for Major Refiners

Eighteen public sector oil companies’ refineries are collectively tasked with producing 31,470 tonnes per day under this new mandate.

In the private sector, Reliance Industries Ltd’s 33 million tonnes per year domestic-tariff area (DTA) refinery in Jamnagar, Gujarat, has been allocated the largest individual quota, requiring it to produce up to 18,000 tonnes of LPG per day.

This comprehensive policy aims to optimize LPG extraction from existing refining infrastructure, encouraging options like converting naphtha into LPG and upgrading fluid catalytic cracking units where viable.

Ensuring Supply Stability

The government’s previous emergency measures, including diverting petrochemical streams to maximize LPG output and temporarily halting industrial sales, were gradually withdrawn as supplies stabilized.

This new order establishes permanent facility-wise production benchmarks, moving beyond temporary crisis responses to build long-term resilience.

The objective is to ensure sufficient domestic availability, equitable distribution, and stable pricing for essential cooking gas across the nation.